The Carbondale Hospital is considering the purchase of a new ambulance. The deci

Question

The Carbondale Hospital is considering the purchase of a new ambulance. The decision will rest partly on the anticipaled mileage to be driven next year The miles driven during the past5 years are as follows: Year Milea 3,050 4,000 3,400 3,8503 700 a) Using a 2-year moving average, the forecast for year 6 3775 miles (round your response to the nearest whole number) b)if a 2-year moving average is used to make the forecanst the MAD based on tind ur response lo one decimalhae o to one decimal place). (Hint: You will harwe only 3 years of matched data.)

Explanation / Answer

2 year moving average for year 3 = (3050 + 4000) / 2 = 3525

2 year moving average for year 4 = (4000 + 3400)/ 2 = 3700

2 year moving average for year 5 = (3400 + 3850) / 2 = 3625

MAD = Sum(|Actual demand - forecast|)/ n

= (|3400 - 3525| + |3850 - 3700| + |3700 - 3625|) / 3

= (125 + 150 + 75) / 3 = 116.66

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